Thomas Bulkowski’s successful investment activities allowed him to retire at age 36. He is an internationally known author and trader with 30+ years of stock market experience and widely regarded as a leading expert on chart patterns. He may be reached at

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Wednesday 11/30/16. A Look At Indicators

This is a picture of the chart pattern indicator on the daily scale. The indicator is the line chart below a chart of the S&P 500 composite.

Notice how the blue line, the chart pattern indicator, has plummeted in the last several days but ticked upward on Tuesday.

I'm not sure what to make of this. The Dow futures are up as I write this before the market opens, so maybe the bearish indications I see in the chart are just my imagination.

But it looks as if the index is rounding over and heading lower, following the indicator down.

The red line is the percentage of stocks at least 20% below their 1-year high (plotted upside down). The blue line is the average percentage drop of stocks below their 1-year high (plotted upside down).

Shown as a red line on the above chart...

On Tuesday, 19% of stocks in my database are in bear market territory (down at least 20% from their 1-year high).

A week ago, it was 18%.

The fewest was 17% on 11/25/2016.

And the most was 70% on 02/11/2016.

Shown as a blue line on the above chart...

The 522 stocks in my database are down an average of 12% from their yearly high.

A week ago, the average was 12%.

The peak was 11% on 11/25/2016.

And the bottom was 32% on 02/11/2016.

The red line shows weakness, too, joining the CPI. The blue line, however, shows no net change from a week ago.

If you look closely at the chart, you can see that both lines have turned lower in the last day or so. This could be another indication of the start of a downward retrace.

Of it could be a pause where stocks go horizontal for a time, gathering strength for another push upward. It's hard to tell if this foretells weakness or just a pause.

If I had to guess, I'd say this shows weakness and we'll see the indices drop over the next week or two.

-- Thomas Bulkowski

Tuesday 11/29/16. Intraday Market Direction: Dow

The index dropped by -0.3% or -54.24 points. Since 10/01/1928 the index made 1012 similar moves on a percentage basis. After those moves, the next day's...

Average gain was 0.6% on 479 occasions.

Average loss was -0.7% on 533 occasions.

Expect the index to close lower 52.7% of the time.

Weekly, since inception on 6/14/2011:

The prediction of the index closing higher has been right 127/213 or 59.6% of the time.

The prediction of the index closing lower has been right 32/63 or 50.8% of the time.

Since I post this the night before, check how the futures are trading before market open. Large moves can affect the opening direction.

$ $ $

I show a picture of the Dow industrials on the 5-minute scale.

I suspect that the long bullish party is over...but maybe not.

The chart pattern indicator has plunged today (Monday), which is not good. That decline was expected but only "when" the drop would occur was in question. Of course, the market could
reverse and the CPI would rebound.

Anyway, I show the Dow breaking the red up trendline that has lasted several days.

The measure rule for trendlines says that the height of the peak at A to the trendline (the green bar hides the peak) should be equivalent to the decline after a downward
breakout. I show that potential drop at B by another green line.

The index has to drop more to meet the target, so we'll have to see if the index will continue lower on Tuesday. The above probabilities suggest it will close lower.

$ $ $

The following table shows where Fibonacci retrace values of the day's high-low range are plus pivot points, calculated on the Dow industrials, sorted by value. When several are near each other (small differences),
the area might act as support or resistance.

Monday 11/28/16. Market Monday: The Week Ahead

My Prediction

I show a picture of the Dow utilities on the daily scale.

The utility index was the best performing index for most of the year until recently. Now, the transports have taken over with a 20.4% gain as I write this. The utility index
comes in second with a gain of 10.8%, ahead of the Dow industrials (9.9%) and S&P (8.8%) with the Nasdaq holding up the rear with a gain year-to-date of 7.8%.

Let's look at the chart.

The index topped out in early July and has been sliding since. Why? My guess is because of the expected rise in interest rates. Utility companies have massive debt and low interest
rates help them with their finances.

The index has bounced off the bottom of the channel, suggesting a short-term uptrend is underway. That rise might collapse when the FED raises rates.

It's also possible that the index will soar then. Why? Because the news will be out and fears of the unknown will subside. Up or down, which view is right? Take your pick.

$ $ $

Here's a thought. Imagine what would happen if President Trump were to cut capital gains tax rates to 0. Or even cut long-term cap gains rate to zero. Wow. The market would likely
plunge. Why? Because everyone including me, would dump their stocks, capturing the tax-free gains.

$ $ $

I told my TV to scan the airwaves for channels and it found 87 in my area. That means I can tune, for free, 87 channels. Those of you wondering how to cut your living expenses, try
cutting the cable cord and getting your TV from the aerial like I do.

A Brief Look Back

The following is a brief review of how the markets performed over time. The numbers refer to the close-to-close move in the Dow industrials.

Monday:Up 88.76 points.

Tuesday:Up 67.18 points.

Wednesday:Up 59.31 points.

Friday:Up 68.96 points.

Saturday: Holiday or other weird event!

For the Week...

The Dow industrials were up 284.21 points or 1.5%.

The Nasdaq composite was up 77.41 points or 1.5%.

The S&P 500 index was up 31.4502 points or 1.4%.

Year to Date...

Dow Industrials

0.0% down from the high of 19,152.14 on 11/25/2016.

24.0% up from the low of 15,450.56 on 01/20/2016.

Nasdaq

0.0% down from the high of 5,398.92 on 11/25/2016.

28.2% up from the low of 4,209.76 on 02/11/2016.

S&P 500

0.0% down from the high of 2,213.35 on 11/25/2016.

22.3% up from the low of 1,810.10 on 02/11/2016.

Options Expiration

No options expire this week.

Swing and Position Traders: Chart Pattern Indicator

As of 11/25/2016, the CPI had:

0 bearish patterns,

44 bullish patterns,

541 patterns waiting for breakout.

The CPI signal is 100.0%, which is
bullish (>= 65%).

The chart pattern indicator is bullish
with 1 of 3 full triangles showing (). Additional triangles are a measure
of strength with solid triangles meaning a more reliable signal than half triangles.

Swing Traders: Pivot Points

The following is based on an SFO article in December 2004 by John Seekinger, titled, "Take a
two-dimensional approach." He offers these tips.

Index

S2

S1

Pivot

R1

R2

Dow Industrials (^DJI): Daily

19,074

19,113

19,133

19,172

19,191

Weekly

18,793

18,973

19,062

19,242

19,332

Monthly

17,461

18,306

18,729

19,575

19,998

S&P500 (^GSPC): Daily

2,204

2,209

2,211

2,216

2,218

Weekly

2,177

2,195

2,204

2,222

2,231

Monthly

2,041

2,127

2,170

2,257

2,300

Nasdaq (^IXIC): Daily

5,373

5,386

5,392

5,405

5,412

Weekly

5,313

5,356

5,377

5,421

5,442

Monthly

4,913

5,156

5,277

5,520

5,642

Seekinger doesn't look at the range of S2 to R2 as support and resistance levels. Rather, he considers them oversold (S) and overbought (R) areas.

S2 to R2 range of values across daily, weekly, and monthly periods: If two values are close together then they lend more significance to the area.

If the market trends on day 1, the odds rise tremendously that the market will be range bound between daily S1 and daily R1 the next day.

In a quiet market when traders are waiting for an important earnings announcement or economic report, look for daily R1 and S1 levels to hold and for the market to return to the daily pivot.

A move outside of daily R1 or S1 usually does not mean a breakout.

The odds suggest that the entire week's price action will remain between weekly R2 and S2.

Consider going short at weekly R1 or long at weekly S1 with a profit objective of the weekly pivot.

Consider going long at weekly S2 or short at weekly R2 with a profit objective of weekly S1 or R1, respectively.

Here are the formulas:

Pivot point: P = (H + L + C)/3

First resistance level: R1 = (2 * P) - L

First support level: S1 = (2 * P) - H)

Second resistance level: R2 = P + (R1 - S1)

Second support level: S2 = P - (R1 - S1)

H = high price , L=low price, C=closing price

Consecutive Price Trends

Index

ConsecutiveCloses So Far

%

Comments

Dow industrials (^DJI)

3 weeks up

21.3%

Expect a reversal soon.

1 month up

52.1%

Expect a random direction.

S & P 500 (^GSPC)

3 weeks up

21.6%

Expect a reversal soon.

1 month up

53.4%

Expect a random direction.

Nasdaq composite (^IXIC)

3 weeks up

25.0%

Expect a reversal soon.

1 month up

46.9%

Expect a random direction.

How long can an index close higher (or lower) each day? The adjacent table shows how often consecutive up or down closes occur in the indices, based on the most recent trend of closes.

Low percentages suggest the market is overdue to turn (think of it as the likelihood that next week or next month will continue the trend, based on historical performance). Values of 50% mean random, so most percentages will be lower.

The analysis uses data going back 10 years for weekly percentages and 25 years for monthly percentages (or the start of data, whichever is more recent). Any unchanged closing price is interpreted as the end of the string of consecutive up or down closes.

Earnings, Chart Patterns & Industries

Earnings season is either underway or should be starting soon. The sessions could be more volatile.

Mutual funds will begin dividend distributions and rebalancing their portfolios for the approaching year end (starts in late November).

Found

Chart Pattern Name

24

Pipe bottom

12

Head-and-shoulders bottom

9

Double Bottom, Adam and Adam

7

Triangle, symmetrical

6

Broadening bottom

6

Triangle, descending

5

Dead-cat bounce

4

Double Top, Adam and Adam

3

Head-and-shoulders top

3

Double Bottom, Adam and Eve

Large numbers of bullish or bearish chart patterns can signal short- to intermediate-term market trends (many bullish chart patterns can mean an uptrend will continue, for example).
However, please realize that the short-term price trend could have changed since the pattern was discovered (this is especially true of pipe tops or bottoms, which are weekly patterns).

The 10 types of most frequently appearing chart patterns in the stocks, indices, and long-only exchange traded funds I follow during the last month are shown in the adjacent table.

The industries I follow were the best (rank 1) and worst performing.

This Week

Last Week

1. Semiconductor

1. Semiconductor

2. Insurance (Life)

2. Semiconductor Cap Equip.

3. Securities Brokerage

3. Securities Brokerage

4. Semiconductor Cap Equip.

4. Insurance (Life)

5. Trucking/Transp. Leasing

5. Trucking/Transp. Leasing

50. Chemical (Diversified)

50. Chemical (Diversified)

51. Electric Utility (West)

51. Advertising

52. Electric Utility (Central)

52. Electric Utility (Central)

53. Biotechnology

53. Electric Utility (West)

54. Toiletries/Cosmetics

54. Toiletries/Cosmetics

55. Electric Utility (East)

55. Electric Utility (East)

56. Household Products

56. Household Products

57. Short ETFs

57. Short ETFs

-- Thomas Bulkowski

Thursday 11/24/16. Intraday Market Direction: Nasdaq

The index dropped by -0.1% or -5.67 points. Since 02/05/1971 the index made 555 similar moves on a percentage basis. After those moves, the next day's...

Average gain was 0.7% on 304 occasions.

Average loss was -0.8% on 251 occasions.

Expect the index to close higher 54.8% of the time.

Weekly, since inception on 6/14/2011:

The prediction of the index closing higher has been right 117/202 or 57.9% of the time.

The prediction of the index closing lower has been right 40/78 or 51.3% of the time.

Since I post this the night before, check how the futures are trading before market open. Large moves can affect the opening direction.

$ $ $

I show a picture of the Nasdaq composite on the 5-minute scale.

The chart shows a channel bounding price that's moving higher. I show that at A, surrounded by two parallel red lines.

The index spent most of the day clawing its way back to the prior day's close. Sadly to say, it didn't make it.

There's not much you can say about channels except two things: 1) Some person flamed at me for not including the pattern in the first version of my Encyclopedia of chart patterns book.
He went on to state that the book was worthless because of it. Yeah, that pissed me off. It taught me not to read Amazon.com customer reviews of my work. And 2) the index will breakout in whatever direction it likes, whenever it likes.

Research says that Friday we'll close down, probably in volatile trading because many traders will stay home and nurse their hangovers.

$ $ $

I bought chicken at Walmart and after I weighed the package, I noticed that it said it could include up to 15% of broth. At $2 a pound, it's expensive water. The trouble is, the package
contained 19% water. Needless to say, I won't be buying the store brand anymore.

$ $ $

The following table shows where Fibonacci retrace values of the day's high-low range are plus pivot points, calculated on the Nasdaq composite, sorted by value. When several are near each other (small differences),
the area might act as support or resistance.

Wednesday 11/23/16. A Look At Indicators

This is a picture of the chart pattern indicator on the daily scale. The indicator is the line chart below a chart of the S&P 500 composite.

The chart pattern indicator has been in a nice uptrend for a while now.

It has reached its peak value of 100 (or nearly so), so do not be alarmed with it going horizontal. It COULD be an indication of weakness. Since the indicator can't rise any further,
where else can it go but down? Sideways, possibly?

If you look at the blue line on the chart, you'll see that it doesn't hang around at peaks for long. The index drops, and that seems to take the index down with it, too, albeit at a slower rate.

And yet we know that peaks tend to be rounded looking (bottoms are more v-shaped...I proved this). For the proof, read chapter 19 in my new book,
Chart Patterns: After the Buy.

I show a picture of that book on the left.

The opening figure on page 361 shows the results.

The next page shows a figure that describes what I found, how the sharp turns outperform the rounded ones.

Think of it this way: The holidays are coming. Ask your significant other to buy you a copy.

The red line is the percentage of stocks at least 20% below their 1-year high (plotted upside down). The blue line is the average percentage drop of stocks below their 1-year high (plotted upside down).

Shown as a red line on the above chart...

On Monday, 18% of stocks in my database are in bear market territory (down at least 20% from their 1-year high).

A week ago, it was 20%.

The fewest was 18% on 11/21/2016.

And the most was 70% on 02/11/2016.

Shown as a blue line on the above chart...

The 522 stocks in my database are down an average of 12% from their yearly high.

A week ago, the average was 13%.

The peak was 12% on 11/21/2016.

And the bottom was 32% on 02/11/2016.

It's been three weeks since I reported on the indicators and look how they have performed. Nice!

In the last week, both the red and blue lines have lost some of their upward momentum. They made a strong push upward from the November low, and then went horizontal.

If you look closely at the right end of the line, you'll see that both lines have resumed their upward march. I hope it continues.

$ $ $

Squirrels have been jumping on my new roof (no, not the one shown in this pic) and using it as a path to a fence that leads to my neighbor's property. I've cut the branches of my live oak tree
to keep them from making the leap, but today I took sterner measures. I opened the window of my second floor office and pulled out my tree trimmer and cut the branches further away.

I'm hoping that will work. The banging with four squirrels running around was causing me to loose concentration. Very annoying. What's worse, is I saw one squirrel gnawing on a neighbors house, on
his eaves, to re-open a space where they once nested. The homeowner used sheet metal to cover the new hole this time. So the squirrels went next door and used a hole in their eaves to nest.

I told those homeowners about that nest but they didn't care. Go figure. They put on a new roof and the hole was patched.

Squirrels might look nice, but they are just rats with nice looking tails. I think of them as tree rats. I DO know that they chew the branches of one of my trees. I find the remains on my lawn
all the time. That gnawing helps keep their teeth from growing too long. I'm not kidding. I read a book on them. All they do is eat and eat and eat and have kids twice a year.

And they eat houses...

-- Thomas Bulkowski

Tuesday 11/22/16. Intraday Market Direction: Dow

The index climbed by 0.5% or 88.76 points. Since 10/01/1928 the index made 901 similar moves on a percentage basis. After those moves, the next day's...

Average gain was 0.7% on 489 occasions.

Average loss was -0.7% on 412 occasions.

Expect the index to close higher 54.3% of the time.

Weekly, since inception on 6/14/2011:

The prediction of the index closing higher has been right 126/212 or 59.4% of the time.

The prediction of the index closing lower has been right 32/63 or 50.8% of the time.

Since I post this the night before, check how the futures are trading before market open. Large moves can affect the opening direction.

I show the pattern highlighted in red. Notice, if you can, that the index has poked its head above the top of the chart pattern. It's hard to see. It's only a black dot on the chart.
To me it suggests the upward trend will continue. I'm cautious, though. A security reluctant to move up is one destined to tumble. Maybe the drop begins on Tuesday?

$ $ $

I bought a voice recorder to take the place of a medical advocate. It'll record what goes on in any future doctor appointments, so I can play them back to review details of the doc's guidance.
I'm going to buy one for my mom because 1) I'm a nice guy and 2) she needs the help.

$ $ $

The following table shows where Fibonacci retrace values of the day's high-low range are plus pivot points, calculated on the Dow industrials, sorted by value. When several are near each other (small differences),
the area might act as support or resistance.

Consider going short at weekly R1 or long at weekly S1 with a profit objective of the weekly pivot.

Consider going long at weekly S2 or short at weekly R2 with a profit objective of weekly S1 or R1, respectively.

Here are the formulas:

Pivot point: P = (H + L + C)/3

First resistance level: R1 = (2 * P) - L

First support level: S1 = (2 * P) - H)

Second resistance level: R2 = P + (R1 - S1)

Second support level: S2 = P - (R1 - S1)

H = high price , L=low price, C=closing price

Consecutive Price Trends

Index

ConsecutiveCloses So Far

%

Comments

Dow industrials (^DJI)

2 weeks up

29.8%

The trend may continue.

1 month up

52.1%

Expect a random direction.

S & P 500 (^GSPC)

2 weeks up

30.1%

The trend may continue.

1 month up

53.4%

Expect a random direction.

Nasdaq composite (^IXIC)

2 weeks up

32.9%

The trend may continue.

1 month up

46.9%

Expect a random direction.

How long can an index close higher (or lower) each day? The adjacent table shows how often consecutive up or down closes occur in the indices, based on the most recent trend of closes.

Low percentages suggest the market is overdue to turn (think of it as the likelihood that next week or next month will continue the trend, based on historical performance). Values of 50% mean random, so most percentages will be lower.

The analysis uses data going back 10 years for weekly percentages and 25 years for monthly percentages (or the start of data, whichever is more recent). Any unchanged closing price is interpreted as the end of the string of consecutive up or down closes.

Earnings, Chart Patterns & Industries

Earnings season is either underway or should be starting soon. The sessions could be more volatile.

Mutual funds will begin dividend distributions and rebalancing their portfolios for the approaching year end (starts in late November).

Found

Chart Pattern Name

24

Pipe bottom

13

Triangle, symmetrical

12

Head-and-shoulders bottom

10

Head-and-shoulders top

9

Double Top, Adam and Adam

9

Double Bottom, Adam and Adam

7

Double Top, Eve and Adam

7

Broadening bottom

6

Dead-cat bounce

6

Triangle, descending

Large numbers of bullish or bearish chart patterns can signal short- to intermediate-term market trends (many bullish chart patterns can mean an uptrend will continue, for example).
However, please realize that the short-term price trend could have changed since the pattern was discovered (this is especially true of pipe tops or bottoms, which are weekly patterns).

The 10 types of most frequently appearing chart patterns in the stocks, indices, and long-only exchange traded funds I follow during the last month are shown in the adjacent table.

Friday 11/18/16. Pattern Trading Setups for the Weekend.

The following patterns were found manually, so the results may differ from those found using Patternz.

There were 13 patterns found this week (excluding pipe bottoms; pipe tops and bottoms are found looking back 2 weeks) out of 625 stocks searched, or 2.1%. Based on the percentage, the stock market is
trending since few consolidation patterns appear.

I found 17 pipe bottom chart patterns, which is neutral. High numbers of pipe bottoms can signal a bullish move (I see many of them just before a bear market ends or during a bear market rally. Often it means the first bottom of a double bottom has formed. Thus, expect a move down to the second bottom).

Excluding ETFs, there were 21 bullish chart patterns this week and 4 bearish ones with any remaining (3) being undecided.
The ratio of bullish to bearish patterns suggests the market is bullish.

In the table below, the red and green colors are based on the historical breakout direction for the associated chart pattern. If a high and tight flag appears, the start and end dates highlight the flagpole only and not the flag.

Thursday 11/17/16. Intraday Market Direction: Nasdaq

The index climbed by 0.4% or 18.96 points. Since 02/05/1971 the index made 569 similar moves on a percentage basis. After those moves, the next day's...

Average gain was 0.7% on 360 occasions.

Average loss was -0.7% on 209 occasions.

Expect the index to close higher 63.3% of the time.

Weekly, since inception on 6/14/2011:

The prediction of the index closing higher has been right 116/201 or 57.7% of the time.

The prediction of the index closing lower has been right 40/78 or 51.3% of the time.

Since I post this the night before, check how the futures are trading before market open. Large moves can affect the opening direction.

$ $ $

I show a picture of the Nasdaq composite on the 5-minute scale.

The red pattern is a symmetrical triangle, and a nicely shaped one at that. The breakout direction from the triangle is unknown until it makes its move.

Because yahoo took their time updating their quotes, I am posting this just before the market opens. And the Dow futures are flat. So the uncertainty continues.

The blue lines show what I thought was a rising wedge (before I drew the lines) but it looks like just another channel.

$ $ $

The following table shows where Fibonacci retrace values of the day's high-low range are plus pivot points, calculated on the Nasdaq composite, sorted by value. When several are near each other (small differences),
the area might act as support or resistance.

Tuesday 11/16/16. Picking Mutual Funds for Performance

Back in early October, I sold about half my IRA holdings (mutual funds) and went into cash. I was able to sidestep the decline that began just days later. On Monday, I moved one under performing fund
to another more promising one. I'm waiting for this recent market spike to retrace, following a buy the dip scenario. I have my mutual funds already picked out, and I'll buy after weakness sets in.

How do I measure performance of funds? Look at the figure.

Price at A has failed to exceed peak C. It shows weakness. Now look at B versus peak D. B is above D, so the fund is outperforming the other scenario.

I just looked for mutual funds with the BD setup and avoided the AC one.

Then I charted both funds on the same scale, starting from the same price. This is a version of relative strength and some charting services will do this for you (I got bigcharts.com to
do it, but now I struggle getting it to work. Go figure). The index or fund on top is the stronger of the two. It's best if the fund has remained on top for a long time.

What you're looking for is a fund that's been strong over time and is beating the index.

A fund that is vastly under performing the indices can also be a worthwhile holding. Think "dogs of the Dow." The under performing fund will turn upward and outperform the others. Eventually.

Unfortunately, an under performing fund can stay that way for a long long time. And its climb to the top of the food chain can be slow, too. Finally, the performance of these dogs is
slightly worse than the other type of momentum play (strong funds tend to remain strong).

I went for a bicycle ride today, the first time since I spit up a mouthful of blood three weeks ago. I didn't push it, because I didn't want to aggravate my lungs, but still averaged
over 17 mph on the ride. That's not bad for a guy approaching 60 but well off last year's pace when I was bumping up against 19 mph over a 14.5 mile course.

-- Thomas Bulkowski

Tuesday 11/15/16. Intraday Market Direction: Dow

The index climbed by 0.1% or 21.03 points. Since 10/01/1928 the index made 1299 similar moves on a percentage basis. After those moves, the next day's...

Average gain was 0.5% on 668 occasions.

Average loss was -0.6% on 631 occasions.

Expect the index to close higher 51.4% of the time.

Weekly, since inception on 6/14/2011:

The prediction of the index closing higher has been right 125/211 or 59.2% of the time.

The prediction of the index closing lower has been right 32/63 or 50.8% of the time.

Since I post this the night before, check how the futures are trading before market open. Large moves can affect the opening direction.

Following that, channel B also has an upward slope but at a much slower pace. This does not surprise me. After a short and steep run-up, like that shown by many stocks, the stock
or index will tend to go flat for a proportionate amount of time. That's what I think we're seeing now.

If strength remains in the index, then we'll see an upward breakout and a resumption of the upward channel (A) following its slope, or nearly so.

If the index weakens, then look for a downward breakout from the channel.

The index could just slide sideways but sooner or later, it will break out.

$ $ $

Visited my dentist. No cavities. No problems. Yippee.

This past weekend, I used my shredder to eat some papers. The instructions warned that it only shreds paper, not staples or anything else. I didn't notice that my vet taped my dog's rabies tag to a paper I was shredding. Oops.

It entered the machine and jammed it. Took a pair of pliers and about five minutes to free it from the machine. Then I used it for another form or two. Then I piled into it about a dozen sheets
(max 7) and the machine ground to a halt and made a funny noise. I unplugged it and cleared the paper from the two shredder rollers but that didn't help. So I dismantled it to find what I
expected: a missing tooth on a nylon gear.

In other words, I toasted my shredder. I bought a new one from Walmart that was cheaper ($55) and this one can chew staples, small paper clips and even credit cards.

The good news is that I figured out how to destroy old DVDs, too. I tried bending them until they broke but that takes a lot of strength and the shards are dangerous when the disk shatters.

Instead, I use tin snips to slice through the disk. Be sure to wear eye protection but you'll find it won't be needed. The disks don't shatter when cut with the snips (at least mine didn't
and I cut hundreds).

For my floppy disks, I put a ice pick through the disk's film.

$ $ $

The following table shows where Fibonacci retrace values of the day's high-low range are plus pivot points, calculated on the Dow industrials, sorted by value. When several are near each other (small differences),
the area might act as support or resistance.

My Prediction

I looked at this chart and looked and looked and didn't really see anything interesting.

The Dow is making new highs, but not this index. Why?

Look at the progress of the index since August. I show that with the red line. It tilts upward, sure, but not by much.

It's possible that the index has been stuck in place by the under performance of a few stocks. I've heard that's a problem with the weighting of stocks in the index.

Whatever the reason, I am thankful for the stocks I own. They are doing spectacular, so spectacular that I fear a collapse of their upward move. That means giving back profit.

Of course, if you sell then the stocks will continue their upward ascent. Hold and they will reverse.

When they do reverse, you exit quickly but then the reverse turns into a pause before a resumption of the upward move.

One of my favorite techniques in such a situation is to put a trailing stop a penny or two below the prior day's low. Move it up each day as price rises. When the stock reverses,
it'll take you out immediately. A no sweat exit. They key to this is to make sure you have a strong trend.

You do that by making sure that the stock has posted at least three higher lows, preferably also making higher highs.

That technique works well for swing trades, when you want to exit at the first sign of a slowdown.

A Brief Look Back

The following is a brief review of how the markets performed over time. The numbers refer to the close-to-close move in the Dow industrials.

Monday:Up 371.32 points.

Tuesday:Up 73.14 points.

Wednesday:Up 256.95 points.

Thursday:Up 218.19 points.

Friday:Up 39.78 points.

For the Week...

The Dow industrials were up 959.38 points or 5.4%.

The Nasdaq composite was up 190.74 points or 3.8%.

The S&P 500 index was up 79.2701 points or 3.8%.

Year to Date...

Dow Industrials

0.1% down from the high of 18,873.66 on 11/10/2016.

22.0% up from the low of 15,450.56 on 01/20/2016.

Nasdaq

2.0% down from the high of 5,342.88 on 09/22/2016.

24.4% up from the low of 4,209.76 on 02/11/2016.

S&P 500

1.3% down from the high of 2,193.81 on 08/15/2016.

19.6% up from the low of 1,810.10 on 02/11/2016.

Economic Reports

The following information is derived from yahoo!finance and sometimes Bloomberg.com with times local to the east coast.

Consider going short at weekly R1 or long at weekly S1 with a profit objective of the weekly pivot.

Consider going long at weekly S2 or short at weekly R2 with a profit objective of weekly S1 or R1, respectively.

Here are the formulas:

Pivot point: P = (H + L + C)/3

First resistance level: R1 = (2 * P) - L

First support level: S1 = (2 * P) - H)

Second resistance level: R2 = P + (R1 - S1)

Second support level: S2 = P - (R1 - S1)

H = high price , L=low price, C=closing price

Consecutive Price Trends

Index

ConsecutiveCloses So Far

%

Comments

Dow industrials (^DJI)

1 week up

42.2%

Expect a random direction.

1 month up

52.1%

Expect a random direction.

S & P 500 (^GSPC)

1 week up

41.4%

Expect a random direction.

1 month up

53.4%

Expect a random direction.

Nasdaq composite (^IXIC)

1 week up

44.3%

Expect a random direction.

1 month up

46.9%

Expect a random direction.

How long can an index close higher (or lower) each day? The adjacent table shows how often consecutive up or down closes occur in the indices, based on the most recent trend of closes.

Low percentages suggest the market is overdue to turn (think of it as the likelihood that next week or next month will continue the trend, based on historical performance). Values of 50% mean random, so most percentages will be lower.

The analysis uses data going back 10 years for weekly percentages and 25 years for monthly percentages (or the start of data, whichever is more recent). Any unchanged closing price is interpreted as the end of the string of consecutive up or down closes.

Earnings, Chart Patterns & Industries

Earnings season is either underway or should be starting soon. The sessions could be more volatile.

Mutual funds will begin dividend distributions and rebalancing their portfolios for the approaching year end (starts in late November).

Found

Chart Pattern Name

13

Triangle, symmetrical

12

Pipe bottom

9

Head-and-shoulders top

9

Double Top, Adam and Adam

7

Double Top, Eve and Adam

7

Triangle, descending

6

Head-and-shoulders bottom

5

Broadening bottom

4

Dead-cat bounce

4

Rectangle top

Large numbers of bullish or bearish chart patterns can signal short- to intermediate-term market trends (many bullish chart patterns can mean an uptrend will continue, for example).
However, please realize that the short-term price trend could have changed since the pattern was discovered (this is especially true of pipe tops or bottoms, which are weekly patterns).

The 10 types of most frequently appearing chart patterns in the stocks, indices, and long-only exchange traded funds I follow during the last month are shown in the adjacent table.

Friday 11/11/16. Pattern Trading Setups for the Weekend.

The following patterns were found manually, so the results may differ from those found using Patternz.

There were 21 patterns found this week (excluding pipe bottoms; pipe tops and bottoms are found looking back 2 weeks) out of 625 stocks searched, or 3.4%. Based on the percentage, the stock market is
trending since few consolidation patterns appear.

I found 6 pipe bottom chart patterns, which is neutral. High numbers of pipe bottoms can signal a bullish move (I see many of them just before a bear market ends or during a bear market rally. Often it means the first bottom of a double bottom has formed. Thus, expect a move down to the second bottom).

Excluding ETFs, there were 15 bullish chart patterns this week and 4 bearish ones with any remaining (5) being undecided.
The ratio of bullish to bearish patterns suggests the market is hinting of a coming bullish (up) turn.

In the table below, the red and green colors are based on the historical breakout direction for the associated chart pattern. If a high and tight flag appears, the start and end dates highlight the flagpole only and not the flag.

Thursday 11/10/16. Intraday Market Direction: Nasdaq

The index climbed by 1.1% or 57.58 points. Since 02/05/1971 the index made 169 similar moves on a percentage basis. After those moves, the next day's...

Average gain was 0.9% on 108 occasions.

Average loss was -1.0% on 61 occasions.

Expect the index to close higher 63.9% of the time.

Weekly, since inception on 6/14/2011:

The prediction of the index closing higher has been right 116/200 or 58.0% of the time.

The prediction of the index closing lower has been right 40/78 or 51.3% of the time.

Since I post this the night before, check how the futures are trading before market open. Large moves can affect the opening direction.

$ $ $

I show a picture of the Nasdaq composite on the 5-minute scale.

The two channels I show here in red. One tilts downward and the other recovers the loss.

A v-bottom is also the name of a chart pattern that resembles the two channels. I just drew the channel lines willy-nilly, so don't be concerned that
price crosses the bottom trendline.

What one can say about channels is that the index will stay between the two lines...until it doesn't.

The most likely breakout direction is downward because an upward breakout would take a big push upward. That could happen. We've already seen a huge rally over the last several days.

And that means a downward retrace is overdue.

$ $ $

I stayed up an extra three hours last night to watch the election returns. I made a party out of it. A pizza (DiGiorno: pepperoni, supposed to be the best of the frozen variety according to
America's Test Kitchen, but it was just OK), salad, and a glass of wine completed the scene. Lots of fun watching the
lead of each state change from person to person. You guys might like the super bowl or world series. I'll take a close election to curl my toes.

During the event, the news media said that the Dow futures were off 800 (over 900 as reported by a friend). I rubbed my hands with glee because I knew that buying at the open would likely
lead to a tasty rebound. But when I checked the futures before the market open, the Dow was off just 300. Yawn. I didn't bother researching this any further.

Of course, I didn't expect the Dow to rise as much as it did. At least I had good instincts.

$ $ $

The following table shows where Fibonacci retrace values of the day's high-low range are plus pivot points, calculated on the Nasdaq composite, sorted by value. When several are near each other (small differences),
the area might act as support or resistance.

Tuesday 11/8/16. Intraday Market Direction: Dow

The index climbed by 2.1% or 371.32 points. Since 10/01/1928 the index made 66 similar moves on a percentage basis. After those moves, the next day's...

Average gain was 0.7% on 35 occasions.

Average loss was -0.9% on 31 occasions.

Expect the index to close higher 53.0% of the time.

Weekly, since inception on 6/14/2011:

The prediction of the index closing higher has been right 124/210 or 59.0% of the time.

The prediction of the index closing lower has been right 32/63 or 50.8% of the time.

Since I post this the night before, check how the futures are trading before market open. Large moves can affect the opening direction.

$ $ $

Both yahoo and google quote systems seemed to have died after the close on Monday. Yahoo isn't reporting at all. Google has so much dirt (0 numbers) in their quotes as to be unusable.
I waited late into the evening for correct data before giving up. This morning (Tuesday), there's no change with the services.

$ $ $

I show a picture of the Dow industrials non the 5-minute scale but on the daily chart.

A symmetrical triangle (A) appears on the chart, shown here in red. I show this scale because I want you to be aware of what I see happening on a longer scale.

Price has pulled back to the apex of the triangle (B). In these cases, there is an increased chance that the index will head back down. It might not happen
today (Tuesday), but it's something to watch for.

$ $ $

If I were elected president, I'd make the hard choices, starting with petitioning congress to get rid of daylight savings time. How about this: We adjust our clocks by one-half hour and
not touch them again.

$ $ $

I won't be posting tonight. I want to watch the election and not worry about how to get today's quotes.

$ $ $

The following table shows where Fibonacci retrace values of the day's high-low range are plus pivot points, calculated on the Dow industrials, sorted by value. When several are near each other (small differences),
the area might act as support or resistance.

Consider going short at weekly R1 or long at weekly S1 with a profit objective of the weekly pivot.

Consider going long at weekly S2 or short at weekly R2 with a profit objective of weekly S1 or R1, respectively.

Here are the formulas:

Pivot point: P = (H + L + C)/3

First resistance level: R1 = (2 * P) - L

First support level: S1 = (2 * P) - H)

Second resistance level: R2 = P + (R1 - S1)

Second support level: S2 = P - (R1 - S1)

H = high price , L=low price, C=closing price

Consecutive Price Trends

Index

ConsecutiveCloses So Far

%

Comments

Dow industrials (^DJI)

1 week down

28.4%

The trend may continue.

4 months down

7.1%

Expect a reversal soon.

S & P 500 (^GSPC)

2 weeks down

15.0%

Expect a reversal soon.

4 months down

3.2%

Expect a reversal soon.

Nasdaq composite (^IXIC)

2 weeks down

17.1%

Expect a reversal soon.

2 months down

15.4%

Expect a reversal soon.

How long can an index close higher (or lower) each day? The adjacent table shows how often consecutive up or down closes occur in the indices, based on the most recent trend of closes.

Low percentages suggest the market is overdue to turn (think of it as the likelihood that next week or next month will continue the trend, based on historical performance). Values of 50% mean random, so most percentages will be lower.

The analysis uses data going back 10 years for weekly percentages and 25 years for monthly percentages (or the start of data, whichever is more recent). Any unchanged closing price is interpreted as the end of the string of consecutive up or down closes.

Earnings, Chart Patterns & Industries

Earnings season is either underway or should be starting soon. The sessions could be more volatile.

Mutual funds will begin dividend distributions and rebalancing their portfolios for the approaching year end (starts in late November).

Found

Chart Pattern Name

20

Triangle, symmetrical

10

Double Top, Adam and Adam

9

Triangle, descending

8

Pipe bottom

7

Head-and-shoulders top

6

Double Top, Eve and Adam

6

Broadening bottom

5

Rectangle top

4

Triangle, ascending

4

Pipe top

Large numbers of bullish or bearish chart patterns can signal short- to intermediate-term market trends (many bullish chart patterns can mean an uptrend will continue, for example).
However, please realize that the short-term price trend could have changed since the pattern was discovered (this is especially true of pipe tops or bottoms, which are weekly patterns).

The 10 types of most frequently appearing chart patterns in the stocks, indices, and long-only exchange traded funds I follow during the last month are shown in the adjacent table.

The industries I follow were the best (rank 1) and worst performing.

This Week

Last Week

1. Semiconductor

1. Semiconductor

2. Semiconductor Cap Equip.

2. Semiconductor Cap Equip.

3. Insurance (Life)

3. Internet

4. Internet

4. E-Commerce

5. Computer Software and Svcs

5. Insurance (Life)

50. Biotechnology

50. Retail Building Supply

51. Retail Building Supply

51. Biotechnology

52. Short ETFs

52. Metals and Mining (Div.)

53. Shoe

53. Short ETFs

54. Toiletries/Cosmetics

54. Shoe

55. Retail (Special Lines)

55. Furn/Home Furnishings

56. Furn/Home Furnishings

56. Retail (Special Lines)

57. Apparel

57. Apparel

-- Thomas Bulkowski

Friday 11/4/16. CT Scan Results

I received a report about my CT scan results. As you may know, I spit up a mouthful of blood back in June (3x) and a week ago.

The CT scan revealed scarring from prior lung infections and inflammation related to a current infection.

The doc prescribed an antibiotic. The first line of the information sheet that came with the drug said, "WARNING: This drug may cause very bad side effects."

That's exactly what I wanted to read. I'm not a fan of horror stories...

The good news is that the drug was free. Wow. Never had that happen before. I once had the doc prescribe Advair. Cost? $120 (after insurance, too). I declined to take it and
called the doc for a cheaper option. He gave me a free sample.

Infection cause? Could be aggressive bicycle riding, which I do, accompanied by foul air from the diesels that pass by along with the polluted air from living in a city.

I was asked to see a pulmonologist, too. I don't even know why, probably to help him keep up payments on his fleet of yachts.

Thanks to all of you that emailed me expressing your concern. It was most appreciated.

-- Thomas Bulkowski

Friday 11/4/16. Pattern Trading Setups for the Weekend.

I've released a new version of patternz, 5.10, which corrects a few bugs with the chart pattern indicator and update. I could not test the installation
like I normally do because my security software kept deleting the setup file. It considered it a virus. The virus co. is looking into the problem.

$ $ $

I had my CT scan done this afternoon. Way cool. The machine whirled around me while I held my breath for just 23 seconds. Then they injected contrast, which in rare
cases can be fatale, and did another pass. It'll be a few days before I get the results mostly because they want to inform the requesting doc before they let me have the data.

They said that depending on the size of the lung, each pass could be worth 300 x-ray pictures. Wow.

Cost? $325 down from $375 because of insurance (big deal since I'm spending $9,200 per year for my bronze health plan and down from $475 from the facility the doc wanted me to use.

The following patterns were found manually, so the results may differ from those found using Patternz.

There were 12 patterns found this week (excluding pipe bottoms; pipe tops and bottoms are found looking back 2 weeks) out of 627 stocks searched, or 1.9%. Based on the percentage, the stock market is
trending since few consolidation patterns appear.

Excluding ETFs, there were 6 bullish chart patterns this week and 2 bearish ones with any remaining (3) being undecided.
The ratio of bullish to bearish patterns suggests the market is hinting of a coming bullish (up) turn.

In the table below, the red and green colors are based on the historical breakout direction for the associated chart pattern. If a high and tight flag appears, the start and end dates highlight the flagpole only and not the flag.

Notice how the index follows the bottom of the channel. From my day trading days, that suggests a downward breakout or at least a continued move lower. If the index were to hover along
the top of the channel, the you'd expect an upward move or breakout.

Combine the down-sloping channel with a lower channel hug, add in the probabilities of the index closing lower tomorrow, and you'd want to avoid the long side.

Just remember that we're overdue for an upward move. So, maybe tomorrow will be it.

$ $ $

The following table shows where Fibonacci retrace values of the day's high-low range are plus pivot points, calculated on the Nasdaq composite, sorted by value. When several are near each other (small differences),
the area might act as support or resistance.

Wednesday 11/2/16. A Look At Indicators

This is a picture of the chart pattern indicator on the daily scale. The indicator is the line chart below a chart of the S&P 500 composite.

The CPI has been bearish for a while now with no up turn indicated. That's why, in part, I remain bearish for the next two weeks (see Tom's Targets in the grid at page top).

Be aware that the blue line at the bottom of the page tends to bounce off the bottom of the scale instead of ride along it, so there is hope of a bullish move soon. If that were to happen,
I would expect it to be short lived, though.

The red line is the percentage of stocks at least 20% below their 1-year high (plotted upside down). The blue line is the average percentage drop of stocks below their 1-year high (plotted upside down).

Shown as a red line on the above chart...

On Friday, 32% of stocks in my database are in bear market territory (down at least 20% from their 1-year high).

A week ago, it was 31%.

The fewest was 25% on 09/07/2016.

And the most was 70% on 02/11/2016.

Shown as a blue line on the above chart...

The 524 stocks in my database are down an average of 18% from their yearly high.

A week ago, the average was 17%.

The peak was 14% on 08/23/2016.

And the bottom was 32% on 02/11/2016.

Both lines ticked down over the past week, adding to the bearish sentiment.

The blue line was flat for quite some time, but even it has thrown in the towel and started to drop.

$ $ $

I took at look at the ObamaCare website. They want about $620 for the cheapest medical plan to $1,230 for the top plan. Get this: None of them cover the two doctors I use (an optometrist
and family doc). I haven't looked to see what type of hospitals are covered, either. If it's like last year, only about three of 20 hospitals will be covered and those three will be rated the
most costly and worst providers. I'm not kidding.

Years ago, I went to one of them as an ER visit after I fell off my bike and broke some bones. Got a call the next day from the doc.
"We missed your collapsed lung," he said and apologized. Fine. Then he asked me to come in so they could x-ray it AGAIN. The ER visit, at his request, his fees, the radiologist, and the x-rays were all
added to my bill. Only the doc waived a portion of his fee when I complained that I returned because he asked me to. HIS mistake cost me almost a grand. Neither my insurance agent no me could change
that.

What's the moral of the story? Don't fall off your bicycle.

-- Thomas Bulkowski

Tuesday 11/1/16. Intraday Market Direction: Dow

The index dropped by -0.1% or -18.77 points. Since 10/01/1928 the index made 1277 similar moves on a percentage basis. After those moves, the next day's...

Average gain was 0.7% on 661 occasions.

Average loss was -0.7% on 616 occasions.

Expect the index to close higher 51.8% of the time.

Weekly, since inception on 6/14/2011:

The prediction of the index closing higher has been right 124/209 or 59.3% of the time.

The prediction of the index closing lower has been right 32/63 or 50.8% of the time.

Since I post this the night before, check how the futures are trading before market open. Large moves can affect the opening direction.

$ $ $

I show a picture of the Dow industrials on the 5-minute scale.

The chart shows the index moving horizontally, roughly cycling up and down along the red line.

Which way will it break out? If you look at a chart of the chart pattern indicator (not shown), then the breakout will be downward. The indicator is heading toward zero today but that signal can change
for up to a week. Stay tuned.

$ $ $

This weekend, I spent most of the day on Saturday installing 25 feet of gutter along my garage and another two hours or so on Sunday to finish the job.

That seems like an unusually long time. Most of Saturday was spent preparing the installation: removing rotten fascia wood (that took a long time because I don't have a reciprocating saw
to slice off six inches of wood buried beneath the drip edge), drilling holes in the gutters, matching the two ends to existing gutters, adding bracing, and so on. I also counted wrong and
needed two additional brackets, meaning another walk to the nearby Home Depot to pick up some.

On Sunday, all I had to do was screw the gutters onto the house, a ten foot section at a time. By myself. I had to devise a way to hold up each ten foot section of metal (put up a bar-clamp and
let the gutter rest on top of it). Unfortunately, I had only two of those clamps.

Coupling the sections together is easy in theory, but with the top end of the joint hidden (it's an upside down J fold that the new gutter slips into) under the drip edge, you can't
see if it's installed right or not. And the far end of the new gutter slips down from under the drip edge, making it difficult to work with alone.

They suggest hanging the gutters first and installing the J brackets to join each section together later, but that's for installations without a drip edge already installed. You install the bracket by wrapping it around
the gutter and bending over the tab at the top to make the inverted J. It's easy unless you have a drip edge installed. Then you have to bend the tabs before hanging the gutter.

But it was a fun project.

$ $ $

Went shopping this morning for a CT scan place. My doc recommended one facility that was two miles from me, in town. I found one about ten miles away that's 27% cheaper. Wow.
Cheaper isn't necessarily better but in this case, it is, in my view.

$ $ $

For those fans of Patternz, I found errors in the chart pattern indicator portion of the program. I found one bug and am still searching why the XP version of patternz gives slightly
different results than the new version. The old version has a bug in it too, that of including the index file in the scan. I'll update both versions when I fix any remaining problems.

$ $ $

The following table shows where Fibonacci retrace values of the day's high-low range are plus pivot points, calculated on the Dow industrials, sorted by value. When several are near each other (small differences),
the area might act as support or resistance.